“Investors Network” Pan Simin
Data elements are gradually moving from behind the scenes to the front of the stage, becoming the new engine of social development.
Recently, Yin Zhijie issued an announcement stating that it has signed a “Strategic Cooperation Framework Agreement” with Qingdao Huatong Institute of Intellectual Research. The agreement between the two sides uses speeding up the market-based allocation reform of data elements as an opportunity to “explore the market-based operation of public data. After the establishment of the National Bureau of Data, top-level plans and local data factor policies were continuously implemented to accelerate industrial development.
Affected by this news, the stock price of Yinzhijie continued to soar on the second day of trading, and finally achieved a 20% rise and stop. According to reports, Yin Zhijie used financial informatization as a starting point, and its business map continues to expand.
Fundamentals are expected to pick up
Yinzhijie has always positioned itself as a fintech service company. In 2013, it began deploying the Internet finance sector using credit reporting services as an entry point, and acquired the enterprise mobile commerce platform Yimei Softcom in 2014. Since this restructuring, Yin Zhijie has formally formed a three-legged business architecture based on financial informatization, mobile information services, and e-commerce.
After the restructuring, Yin Zhijie once ushered in a period of high performance, but the good times did not last long, and the three major businesses continued to decline. In 2021 and 2022, the company lost net profit for two consecutive years. The main causes of losses in 2021 involved large customer order fluctuations, industry competition, and impairment of goodwill, etc., while in 2022, it was mainly due to factors such as industry competition, international political and economic fluctuations, and supplementary impairment of goodwill.
Entering 2023, Yin Zhijie's fundamentals improved slightly. In terms of performance, Yinzhijie achieved total revenue of 525 million yuan in the first half of the year, an increase of 5.22% over the previous year; net profit loss was 27.337,400 yuan, and losses narrowed by 42.7%.
Judging from business segmentation, financial informatization business revenue profits are recovering.
The company's financial informatization business mainly provides banks and other financial institutions with software development, digital financial solutions, special financial equipment and technical services, including software and hardware. The software and hardware products provided are mainly products with independent intellectual property rights, and also provide customers with services such as customized software development, software outsourcing, and operation and maintenance support.
In recent years, the size of the solution market, which mainly focuses on software services, has continued to grow, and the share of software services has gradually increased. According to IDC, the total IT investment of China's banking industry in 2022 was 144.6 billion yuan, of which software and services accounted for nearly 55%. Banking investment is expected to reach 221.3 billion yuan in 2026.
Moreover, from 2022 to 2027, the total size of the Bank of China IT solutions market is expected to achieve a compound growth rate of 17.1%, from 64.9 billion yuan to 142.9 billion yuan, which is faster than the hardware market.
Benefiting from industry growth, in the first half of 2023, the company's financial informatization business achieved revenue of 70.97 million yuan, an increase of 40.18% over the same period last year. Among them, financial software business revenue was 40.65 million yuan, up 17.64% year on year, gross profit margin was 42.18%, up 14.54 percentage points year on year; financial special equipment revenue was 30.32 million yuan, up 88.61% year on year, and gross margin reached 43.42%, up 9.68 percentage points year on year.
At the same time, the company's mobile information business is gradually returning to a growth path.
According to the announcement, the integrated communication solution developed by Yimei Softcom, a wholly-owned subsidiary, around 5G messaging, provides enterprises with the ability to aggregate multiple scenarios, involving verification, notification and marketing of enterprise business scenarios to meet enterprise communication connectivity and information distribution needs. Since its establishment, Yimei Softcom's business services have covered more than 800 million mobile phone users, and has many well-known domestic and foreign customers such as Alibaba, Alipay, and China CITIC Bank.
In recent years, due to the increase in telecom operator channel costs and the company's strengthening of cost control and industry competition, Yin Zhijie's performance in the mobile information business has been under pressure. However, with the recovery of corporate economic activity in 2023, the mobile information business revenue for the first half of the year was 269 million yuan, an increase of 2.71% over the previous year, and the growth rate has been corrected.
Dongwu Securities believes that the bank customer base accumulated by the company in the financial industry is expected to have a business synergy with Yimei Softcom's mobile information business, helping Yimei Softcom increase its market share and operating performance.
In addition, the gross margin of the company's e-commerce business has gradually increased to around 40%. Yin Zhijie's e-commerce business relies on Anke Preferred, a wholly-owned subsidiary, to carry out cross-border e-commerce for home security electronic products. Although domestic cross-border e-commerce bucked the trend this year, and exports in the first three quarters increased 17.7% year-on-year to 1.3 trillion yuan, the main beneficiaries were e-commerce platforms with reduced consumption represented by Pinduoduo. Whether Anco Preferred can seize this cross-border e-commerce growth opportunity needs to be raised with a question mark.
Implementing data element applications has become the key to breaking the game
The improvement in fundamentals may only support a rebound in the company's stock price from a low level. However, if we want to usher in a new round of stock price increases, the key still lies in the expectation that the company will become a leader in implementing data element applications.
According to the “2020-2021 China Data Factor Market Development Report”, the domestic data element market is divided into seven major modules: data collection, data storage, data processing, data circulation, data analysis, data application, and ecological assurance, reflecting the whole process of data elements from generation to factor effects.
However, with years of industry accumulation, Yin Zhijie has a leading edge in data application. As a data service provider, linking data providers with data requestors, it can complete the final step of public data monetization.
Yin Zhijie's data element business is mainly divided into data element infrastructure platform construction and financial scenario monetization for public data operations. The former mainly builds data asset registration/governance/evaluation platforms, public data operation platforms, and underlying technology platforms for government and financial customers; the latter mainly targets financial scenarios, applies open public data to financial business scenarios, and provides financial institution customers in the form of products.
There are two types of derived business models. One is infrastructure platform construction, where system development fees or technical service fees are charged according to the content of the platform project, that is, a one-time fee; the second is that data products and services will be charged according to the number of times the data product is called, or a cooperative model of pay-for-results is reached with customers, such as charging fees or profit sharing according to a certain proportion of business scale.
Currently, various subsidiaries under Yinzhijie, including Yimei Softcom, Huadao Credit Information, Baixing Credit Information, and Jie Zhirong, etc., have all carried out product services from data processing, management, and distribution to application of the entire industry chain, ultimately realizing the application of data products in the financial scenario.
Judging from the specific product implementation, the company has completed the integrated development of dozens of data products, and has application cases for data products in financial scenarios. Yin Zhijie mainly targets financial institution customers such as banks and insurance, and has developed four types of data products and services, including personal credit risk control, corporate credit risk control, insurance industry services, and data mining services. In the future, based on liberalized public licensing data, it is expected to take the lead in financial customers.
Judging from market share, the company has been deeply involved in fintech for 25 years, with customers covering nearly 400 banks or branches in 31 provinces, municipalities and autonomous regions in China, covering policy banks, large state-owned commercial banks, major national joint stock banks, and some urban commercial banks, rural commercial banks and rural credit associations, covering more than 100,000 bank outlets, accounting for about 45% of the total number of banking financial institutions operating in the country.
It can be said that in the field of data application, whether it is the customer base, technology and service capabilities, or the market share of core products, Yin Zhijie is in a leading position in the same industry in China.
Publish the Bureau's public data business first
Having application scenarios alone is not enough; mastering core data is the key. Judging from the supply side of the data, there are three types of entities participating, respectively, the government guidance category, the data service provider category, and the large Internet enterprise. Among them, the government guidance category is the first and largest participant to join the data trading market.
As public data openness policies continue to advance, authorized operations are becoming more open. According to the investor exchange records disclosed by Yin Zhijie on September 23, 2023, the company has established business ties with 21 provincial capitals, municipal data bureaus, big data groups or data exchanges in 16 provinces in China. In terms of government public data sources, Yin Zhijie has a first-mover advantage and is expected to become the first data service provider to implement data applications after the licensing and operation of public data is liberalized.
In addition, Yin Zhijie's own data for various businesses is huge, helping the company improve its data monetization capabilities.
In terms of credit reporting business, Huadao Credit, a subsidiary company, established Baixing Credit Reporting, which is the first licensed market-based personal credit reporting agency in China. In the first half of 2023, 49.94 million new information subjects were added to Baixing's personal credit information database in the first half of the year, of which the number of credit information subjects increased by 14.98 million, bringing the total number of databases to 618 million. According to Yinzhijie's 2023 interim report, Baixing Credit achieved sales revenue of 612 million yuan in the first half of 2023, an increase of 226% over the previous year.
In the field of mobile information services, the subsidiary Yimei Softcom has provided mobile information communication and mobile Internet application services to more than 500,000 enterprises, including banks, hotels, aviation, tourism, e-commerce, and supermarkets, with service data covering about 800 million people. (Produced by Thinking Finance) ■